Spain’s unemployment rate dropped to an 18-year low in the fourth quarter of 2025, according to data released on Tuesday, as growth in service-sector jobs and permanent contracts provided early signs of stabilising one of Europe’s weakest labour markets.

At 9.93% last quarter, the country’s jobless rate is the lowest since the 2008 financial crisis, which severely affected Spain, although it remains among the highest in the European Union.

Youth unemployment, while also at its lowest level since the crisis, remains persistently high at 23%, the data showed.

Nevertheless, economists noted that Spain’s robust economic growth, along with a 2021 labour reform restricting the use of temporary contracts, is beginning to pave the way toward more stable and higher overall employment.

They added that Spain’s openness to immigration has also helped fill gaps in key sectors, supporting job creation.

“Immigration sets us apart from other countries,” stated Raymond Torres of think tank FUNCAS. “It has dynamised growth in sectors like hospitality and care which otherwise would have encountered labour shortages.”

Spain’s Socialist government has promoted integrating migrants into the labour market to support the welfare state and economic growth, distinguishing itself from other European countries that are tightening border controls, Reuters reports.

On Monday, the government reached an agreement with the hard-left party Podemos, expected to be approved by the cabinet in the coming weeks, to fast-track legal status for around 500,000 undocumented migrant workers who have lived in Spain for at least five months and have no criminal record.

Spain generated the highest number of jobs in the eurozone in 2025, adding 605,400 positions, 92% of which were in the private sector, according to government data. Of these, 574,700 were full-time roles and 30,700 were part-time.

Torres noted that maintaining this momentum will require improving job opportunities for young people, expanding construction to address the housing crisis, and attracting additional private investment.